Correlation Between Carters and Penn National
Can any of the company-specific risk be diversified away by investing in both Carters and Penn National at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Carters and Penn National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carters and Penn National Gaming, you can compare the effects of market volatilities on Carters and Penn National and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Carters with a short position of Penn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carters and Penn National.
Diversification Opportunities for Carters and Penn National
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Carters and Penn is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Carters and Penn National Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penn National Gaming and Carters is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Carters are associated (or correlated) with Penn National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penn National Gaming has no effect on the direction of Carters i.e., Carters and Penn National go up and down completely randomly.
Pair Corralation between Carters and Penn National
Considering the 90-day investment horizon Carters is expected to under-perform the Penn National. In addition to that, Carters is 1.42 times more volatile than Penn National Gaming. It trades about -0.08 of its total potential returns per unit of risk. Penn National Gaming is currently generating about 0.18 per unit of volatility. If you would invest 1,517 in Penn National Gaming on May 28, 2025 and sell it today you would earn a total of 471.00 from holding Penn National Gaming or generate 31.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carters vs. Penn National Gaming
Performance |
| Timeline |
| Carters |
| Penn National Gaming |
Carters and Penn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carters and Penn National
The main advantage of trading using opposite Carters and Penn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carters position performs unexpectedly, Penn National can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Penn National will offset losses from the drop in Penn National's long position.| Carters vs. Childrens Place | Carters vs. Gildan Activewear | Carters vs. Oxford Industries | Carters vs. Columbia Sportswear |
| Penn National vs. DraftKings | Penn National vs. MGM Resorts International | Penn National vs. Caesars Entertainment | Penn National vs. Boyd Gaming |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Correlations module to find global opportunities by holding instruments from different markets.
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